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Th e most recent revision shows GDP growth in the fi rst-quarter
at 1.0%; up slightly from its previous estimate of
0.9%. Th e economy continued to drag due to the hous-ing
situation. Initial estimates of second-quarter growth
are at 1.9%. Th is surge is primarily due to a dramatic
rise in net exports even in the face of falling manufactur-ing
output and consumption growth due to the econom-ic
stimulus payments. Th ese infl uences may be sustained
some in the next quarter but GDP growth is expected to
be much weaker by the end of the year.
Housing starts leapt by 9.1% in June. But this was an
aberration caused by building code changes in New
York City. In contrast, single-family housing starts fell
by 5.3%. Housing starts in the south were fl at. Single-family
permits sank by 3.5%; signaling a further drop in
housing starts in the third quarter. Th is ongoing trend
has led to high inventories. Th e vacancy rate of the
homeowner inventory was 2.8% in the second quarter,
down slightly from a record high of 2.9% in the fi rst
quarter. Th e rate is highest in the South, at 3.2%.
Th e June unemployment rate held at 5.5% and payrolls
fell by 62,000. April and May were down a combined
52,000, continuing the negative trend from the fi rst
quarter. Manufacturing (down 33,000) and construc-tion
(down 43,000) losses led the way, and, to a lesser
extent, the retail sector (down 8,000). However, certain
sectors showed strength. Health care and education jobs
were up 15,000 each and food and drinking places were
up 16,000. Additionally, state and local government hir-ing
was up 25,000. Even with the growth in the second
quarter, jobs are being shed to reduce costs and weather
the overall slowdown.
Consumer prices climbed 1.1% in June after a far more
moderate April and May. Th e surge was led by energy
prices, which increased by 6.6%. Gasoline was the
main factor. It rose 10.1% in June. Over the fi rst two
quarters of 2008, energy prices have risen by 29.1%.
In addition to energy, food prices rose 0.8% in June
after a May of 0.3% and April of 0.9%. Core infl ation,
excluding food and energy, has been steadily increasing
with an April increase of 0.1%, a May increase of 0.2%,
and a June increase of 0.3%. Over the last year, headline
consumer prices have risen 5.0% and core prices have
risen 2.5%.
Retail and food service sales rose by only 0.1% in June
after a revised gain of 0.8% in May. Th e purchase of
big ticket items such as cars and furniture has slowed
considerably. Instead, the sale of discount and essential
items posted solid gains. Th is anemic growth comes
while the consumer had the boost of tax rebates. Posi-tive
sales growth for the immediate future is uncertain as
the infl uence of the stimulus checks fade.
In contrast to the 2.3% growth in GDP, the industrial
output fell by a 3.1% annualized pace in the second
quarter – driven by results in April and May. Industrial
production grew by 0.5% in June. However, the growth
was fueled by one time events rather than signaling a
change in direction. A heat wave propped up utility
output, which grew by 2.1%. In addition, the Ameri-can
Axle strike ended in late May. Pent up demand
led a 5.4% increase in motor vehicles and parts. Core
manufacturing (excluding high technology and motor
vehicles) declined by 0.2%.
North Carolina’s seasonally adjusted rate of unemploy-ment
increased 0.1% to 6.0% in June. At 6.0%, North
Carolina’s unemployment rate was 0.5% higher than the
national rate. Over the past year, North Carolina’s un-employment
rate has increased 1.3%. Th e total number
of people employed decreased by 0.1% to 4,288,946.
After several months of employment declines, the June
payroll survey of employers showed a small increase in
jobs. Nonfarm employment increased by 5,600 over the
month and has increased by 25,700 since June 2007.
Government had the largest monthly gain (6,400), fol-lowed
by Professional and Business Services (1,800), and
Trade, Transportation, and Utilities (1,500). Since June
2007, Educational and Health Services has gained the
most jobs (17,500).
Refl ecting the housing market slowdown, Construction
had the largest monthly decrease (3,900). Over the past
year, this sector has lost 800 jobs (0.3%). Manufactur-ing
also registered a monthly decrease (3,100). Since the
beginning of the 2001 recession, North Carolina has lost
28.5% (207,100) manufacturing jobs while the nation
has lost 20.1% during that same period.
North Carolina’s personal income grew 0.9% in the
fi rst quarter of 2008, after growing 1.4% in the last
quarter of 2007. Across states, North Carolina’s growth
ranked 30th and slightly lagged the national growth rate
of 1.1%. Compared to the 12 SE region states, North
Carolina’s growth ranked 5th behind Virginia, Georgia,
Florida, and South Carolina.
North Carolina did not experience the same bump in
speculative housing as other areas, which has helped
insulate the state from some of the market’s troubles.
After a solid start to 2007-08, General Fund revenue
growth slowed in the second half of the fi scal year. Net
tax revenue totaled $1,878.3 million in June, an increase
of 2.1% compared to last year. Th is modest increase was
driven by growth in personal income tax collections.
June is one of the largest collection months of the year
for individual income taxes. Net individual income tax
collections were $987.9 million in June, about 5.3%
above June 2007 levels. Lower June refunds represented
a signifi cant contribution to this gain, as withholding
and quarterly payments registered very slight growth.
Specifi cally, withholding collections totaled $720.5 mil-
However, North Carolina has not been completely im-mune.
Housing starts have fallen over 30% since their
peak in early 2006. Housing permits, a strong leading
indicator of housing activity, are currently over 40%
below peak 2006 levels.
lion, about 2.1% above last year. Quarterly estimated
payments were $298.0 million, about the same as June
2007 collections.
Refl ecting the general slowdown in the economy and
consumer spending, sales and use tax collections were
$407.4 million in June, about 3.7% below last year. For
the fi rst 6 months of 2008, sales tax collections fi nished
4.6% below 2007 levels. While the economic stimulus
was expected to temporarily boost consumer spending,
this bump has not yet translated into increased sales col-lections
in North Carolina.
Th e economic slowdown has also spread into lower cor-porate
profi ts. Refl ecting this tougher business climate,
corporate collections fi nished below June 2007 levels.
Gross corporate payments were $290.4 million in June,
only slightly below last year. However, once higher June
corporate refunds are included, net corporate collections
totaled $278.4 million, about 3.5% below June 2007.
Consistent with the trend throughout most of the coun-try,
North Carolina’s revenue collections slowed consid-erably
in 2007-08. Total General Fund revenue collec-tions
totaled $19,825.7 million in 2007-08, only 1.9%
Highway Fund revenue collections, for the fi scal year
ending June 30, 2008, exceeded forecast by 1.5% or
$27.5 million. Highway Fund revenue collections from
the excise tax on motor fuels and related fees fell short of
expectations by 0.9% or $11.3 million. Combined with
Highway Trust Fund motor fuel tax collections, total
motor fuel tax revenues missed projections by 0.8% or
$12.1 million.
Highway Fund license and registration fee collections
were 1.6% or $9.4 million above budget. Revenues
from other licenses and fees exceeded projections by
$0.2 million while revenues from staggered registrations,
above 2006-07. Th is modest growth was anticipated
by the 2007-08 revenue forecast as revenue collections
exceeded expectations by $70.0 million (0.3%). While
sales tax collections lagged behind projections, solid
corporate and nontax revenue collections accounted for
the small surplus.
driver licenses, and truck registrations increased $9.2
million greater than expected.
For the month of June, Highway Fund license and fee
collections exceeded projections by 6.8% or $3.2 mil-lion.
Total motor fuel tax collections were 6.3% or $6.6
million below expectations.
Highway Trust Fund revenue collections, for the fi scal
year ending June 30th 2008, were 6% or $68.2 million
below expectations. Motor fuel tax collections fell short
of forecast by 0.4% or $1.5 million. Use tax collections,
from car sales, declined $57.8 million or 9.3% for the
fi scal year. Title and miscellaneous fee collections, which
are related to vehicle sales, ended the fi scal year 8.4% or
$9.5 million below projections.
For the month of June, total Highway Trust Fund motor
fuels and highway use tax collections declined 11.5%
or $10.5 million. Highway Trust Fund title fees and
miscellaneous fee collections declined 12.6% or $1.2
million for the month.
Total Highway and Highway Trust Fund revenue, was
1.4% or $40.7 million below a budgeted amount of
$2,930.4 million in 2007-08.
County Population Estimates: In May, OSBM released
its 2007 provisional county population estimates. Wake
and Mecklenburg Counties had the highest estimated
total growth between April 2000 and July 2007 at over
205,000 and 167,000 respectively. Eight counties–
Union, Camden, Brunswick, Wake, Currituck, John-ston,
Hoke, and Cabarrus–are estimated to have had
population growth of more than 25% between April
2000 and July 2007. Th e fastest growing county, Union,
is estimated to have grown by more than 47%.
At the other end of the spectrum, according to OSBM’s
2007 provisional county population estimates, Edge-combe,
Martin and Hyde Counties have lost more
than 6% of their population between April 2000 and
July 2007. Edgecombe, Halifax, and Lenoir are each
estimated to have lost more than 2,000 people over the
same time period.
State and County Population Projections: In June,
OSBM also released its most recent state and county
population projections. At the state level, population is
expected to increase by 4.4 million between April 2000
and April 2030, reaching nearly 12.5 million by 2030.
Approximately 60% of this growth is projected to come
from net migration into the state. Th e population will
also age between April 2000 and April 2030, with the
median age increasing from 35.3 years to 37.8 years.
Not just the older population, however, is expected
to grow. Th e number of elementary and high school
students is projected to increase by more than 635,000
by April 2030. Th e potential labor force (ages 16-64) is
expected to increase by more than 2.4 million people by
April 2030. Th e population ages 65 and older will more
than double between April 2000 and April 2030, reach-ing
nearly 2.2 million by April 2030.
At the county level, 11 counties–Wake, Mecklenburg,
Union, Guilford, Johnston, Cabarrus, Forsyth, Durham,
Iredell, New Hanover and Brunswick–are expected to
grow by more than 100,000 between April 2000 and
April 2030. Two counties, Wake and Mecklenburg, are
projected to have April 2030 populations greater than
1 million. Wake County is estimated to be the most
populous county in April 2030 at more than 1.56 mil-lion
(growth of more than 900,000 people compared
to April 2000). Mecklenburg is expected to reach 1.46
million, a growth of more than 760,000 people. Al-though
Mecklenburg is currently the most populous
county, Wake County’s population is expected to surpass
Mecklenburg’s by 2013. At that time, Wake County
is expected to have a population of nearly 1.02 mil-lion.
Ten counties–Union, Camden, Wake, Brunswick,
Hoke, Johnston, Currituck, Cabarrus, Mecklenburg and
Iredell–are projected to grow more than 100% between
April 2000 and April 2030. Th e county estimated to
grow the fastest, Union County, is expected to grow by
215%.
By contrast, 19 counties will likely lose population be-tween
April 2000 and April 2030. Edgecombe, Halifax,
Lenoir and Martin Counties are all expected to decline
by more than 6,000 people, with Edgecombe estimated
to decline by approximately 15,000 between April 2000
and April 2030. Nine counties–Edgecombe, Hyde,
Martin, Washington, Halifax, Lenoir, Northampton,
Anson and Bertie–are expected to lose more than 10%
of their populations between April 2000 and April 2030.
Edgecombe, Hyde, and Martin Counties are each pro-jected
to decrease by more than 20%.
Municipal Population Estimates: Th e U.S. Census
released its 2007 municipal population estimates for the
nation in July. Cary (ranked 5th) and Raleigh (ranked
13th) were among the fastest growing cities in the nation
with populations over 100,000 between July 2006 and
July 2007. Charlotte (ranked 9th) and Raleigh (ranked
10th) were among the greatest numerical gainers in
population. Overall, the U.S. Census estimates that
Charlotte was the 19th largest city in the U.S in 2007.
On the Horizon: Look for OSBM to release both its
certifi ed 2007 county estimates and its certifi ed 2007
municipal estimates in September.

Th e most recent revision shows GDP growth in the fi rst-quarter
at 1.0%; up slightly from its previous estimate of
0.9%. Th e economy continued to drag due to the hous-ing
situation. Initial estimates of second-quarter growth
are at 1.9%. Th is surge is primarily due to a dramatic
rise in net exports even in the face of falling manufactur-ing
output and consumption growth due to the econom-ic
stimulus payments. Th ese infl uences may be sustained
some in the next quarter but GDP growth is expected to
be much weaker by the end of the year.
Housing starts leapt by 9.1% in June. But this was an
aberration caused by building code changes in New
York City. In contrast, single-family housing starts fell
by 5.3%. Housing starts in the south were fl at. Single-family
permits sank by 3.5%; signaling a further drop in
housing starts in the third quarter. Th is ongoing trend
has led to high inventories. Th e vacancy rate of the
homeowner inventory was 2.8% in the second quarter,
down slightly from a record high of 2.9% in the fi rst
quarter. Th e rate is highest in the South, at 3.2%.
Th e June unemployment rate held at 5.5% and payrolls
fell by 62,000. April and May were down a combined
52,000, continuing the negative trend from the fi rst
quarter. Manufacturing (down 33,000) and construc-tion
(down 43,000) losses led the way, and, to a lesser
extent, the retail sector (down 8,000). However, certain
sectors showed strength. Health care and education jobs
were up 15,000 each and food and drinking places were
up 16,000. Additionally, state and local government hir-ing
was up 25,000. Even with the growth in the second
quarter, jobs are being shed to reduce costs and weather
the overall slowdown.
Consumer prices climbed 1.1% in June after a far more
moderate April and May. Th e surge was led by energy
prices, which increased by 6.6%. Gasoline was the
main factor. It rose 10.1% in June. Over the fi rst two
quarters of 2008, energy prices have risen by 29.1%.
In addition to energy, food prices rose 0.8% in June
after a May of 0.3% and April of 0.9%. Core infl ation,
excluding food and energy, has been steadily increasing
with an April increase of 0.1%, a May increase of 0.2%,
and a June increase of 0.3%. Over the last year, headline
consumer prices have risen 5.0% and core prices have
risen 2.5%.
Retail and food service sales rose by only 0.1% in June
after a revised gain of 0.8% in May. Th e purchase of
big ticket items such as cars and furniture has slowed
considerably. Instead, the sale of discount and essential
items posted solid gains. Th is anemic growth comes
while the consumer had the boost of tax rebates. Posi-tive
sales growth for the immediate future is uncertain as
the infl uence of the stimulus checks fade.
In contrast to the 2.3% growth in GDP, the industrial
output fell by a 3.1% annualized pace in the second
quarter – driven by results in April and May. Industrial
production grew by 0.5% in June. However, the growth
was fueled by one time events rather than signaling a
change in direction. A heat wave propped up utility
output, which grew by 2.1%. In addition, the Ameri-can
Axle strike ended in late May. Pent up demand
led a 5.4% increase in motor vehicles and parts. Core
manufacturing (excluding high technology and motor
vehicles) declined by 0.2%.
North Carolina’s seasonally adjusted rate of unemploy-ment
increased 0.1% to 6.0% in June. At 6.0%, North
Carolina’s unemployment rate was 0.5% higher than the
national rate. Over the past year, North Carolina’s un-employment
rate has increased 1.3%. Th e total number
of people employed decreased by 0.1% to 4,288,946.
After several months of employment declines, the June
payroll survey of employers showed a small increase in
jobs. Nonfarm employment increased by 5,600 over the
month and has increased by 25,700 since June 2007.
Government had the largest monthly gain (6,400), fol-lowed
by Professional and Business Services (1,800), and
Trade, Transportation, and Utilities (1,500). Since June
2007, Educational and Health Services has gained the
most jobs (17,500).
Refl ecting the housing market slowdown, Construction
had the largest monthly decrease (3,900). Over the past
year, this sector has lost 800 jobs (0.3%). Manufactur-ing
also registered a monthly decrease (3,100). Since the
beginning of the 2001 recession, North Carolina has lost
28.5% (207,100) manufacturing jobs while the nation
has lost 20.1% during that same period.
North Carolina’s personal income grew 0.9% in the
fi rst quarter of 2008, after growing 1.4% in the last
quarter of 2007. Across states, North Carolina’s growth
ranked 30th and slightly lagged the national growth rate
of 1.1%. Compared to the 12 SE region states, North
Carolina’s growth ranked 5th behind Virginia, Georgia,
Florida, and South Carolina.
North Carolina did not experience the same bump in
speculative housing as other areas, which has helped
insulate the state from some of the market’s troubles.
After a solid start to 2007-08, General Fund revenue
growth slowed in the second half of the fi scal year. Net
tax revenue totaled $1,878.3 million in June, an increase
of 2.1% compared to last year. Th is modest increase was
driven by growth in personal income tax collections.
June is one of the largest collection months of the year
for individual income taxes. Net individual income tax
collections were $987.9 million in June, about 5.3%
above June 2007 levels. Lower June refunds represented
a signifi cant contribution to this gain, as withholding
and quarterly payments registered very slight growth.
Specifi cally, withholding collections totaled $720.5 mil-
However, North Carolina has not been completely im-mune.
Housing starts have fallen over 30% since their
peak in early 2006. Housing permits, a strong leading
indicator of housing activity, are currently over 40%
below peak 2006 levels.
lion, about 2.1% above last year. Quarterly estimated
payments were $298.0 million, about the same as June
2007 collections.
Refl ecting the general slowdown in the economy and
consumer spending, sales and use tax collections were
$407.4 million in June, about 3.7% below last year. For
the fi rst 6 months of 2008, sales tax collections fi nished
4.6% below 2007 levels. While the economic stimulus
was expected to temporarily boost consumer spending,
this bump has not yet translated into increased sales col-lections
in North Carolina.
Th e economic slowdown has also spread into lower cor-porate
profi ts. Refl ecting this tougher business climate,
corporate collections fi nished below June 2007 levels.
Gross corporate payments were $290.4 million in June,
only slightly below last year. However, once higher June
corporate refunds are included, net corporate collections
totaled $278.4 million, about 3.5% below June 2007.
Consistent with the trend throughout most of the coun-try,
North Carolina’s revenue collections slowed consid-erably
in 2007-08. Total General Fund revenue collec-tions
totaled $19,825.7 million in 2007-08, only 1.9%
Highway Fund revenue collections, for the fi scal year
ending June 30, 2008, exceeded forecast by 1.5% or
$27.5 million. Highway Fund revenue collections from
the excise tax on motor fuels and related fees fell short of
expectations by 0.9% or $11.3 million. Combined with
Highway Trust Fund motor fuel tax collections, total
motor fuel tax revenues missed projections by 0.8% or
$12.1 million.
Highway Fund license and registration fee collections
were 1.6% or $9.4 million above budget. Revenues
from other licenses and fees exceeded projections by
$0.2 million while revenues from staggered registrations,
above 2006-07. Th is modest growth was anticipated
by the 2007-08 revenue forecast as revenue collections
exceeded expectations by $70.0 million (0.3%). While
sales tax collections lagged behind projections, solid
corporate and nontax revenue collections accounted for
the small surplus.
driver licenses, and truck registrations increased $9.2
million greater than expected.
For the month of June, Highway Fund license and fee
collections exceeded projections by 6.8% or $3.2 mil-lion.
Total motor fuel tax collections were 6.3% or $6.6
million below expectations.
Highway Trust Fund revenue collections, for the fi scal
year ending June 30th 2008, were 6% or $68.2 million
below expectations. Motor fuel tax collections fell short
of forecast by 0.4% or $1.5 million. Use tax collections,
from car sales, declined $57.8 million or 9.3% for the
fi scal year. Title and miscellaneous fee collections, which
are related to vehicle sales, ended the fi scal year 8.4% or
$9.5 million below projections.
For the month of June, total Highway Trust Fund motor
fuels and highway use tax collections declined 11.5%
or $10.5 million. Highway Trust Fund title fees and
miscellaneous fee collections declined 12.6% or $1.2
million for the month.
Total Highway and Highway Trust Fund revenue, was
1.4% or $40.7 million below a budgeted amount of
$2,930.4 million in 2007-08.
County Population Estimates: In May, OSBM released
its 2007 provisional county population estimates. Wake
and Mecklenburg Counties had the highest estimated
total growth between April 2000 and July 2007 at over
205,000 and 167,000 respectively. Eight counties–
Union, Camden, Brunswick, Wake, Currituck, John-ston,
Hoke, and Cabarrus–are estimated to have had
population growth of more than 25% between April
2000 and July 2007. Th e fastest growing county, Union,
is estimated to have grown by more than 47%.
At the other end of the spectrum, according to OSBM’s
2007 provisional county population estimates, Edge-combe,
Martin and Hyde Counties have lost more
than 6% of their population between April 2000 and
July 2007. Edgecombe, Halifax, and Lenoir are each
estimated to have lost more than 2,000 people over the
same time period.
State and County Population Projections: In June,
OSBM also released its most recent state and county
population projections. At the state level, population is
expected to increase by 4.4 million between April 2000
and April 2030, reaching nearly 12.5 million by 2030.
Approximately 60% of this growth is projected to come
from net migration into the state. Th e population will
also age between April 2000 and April 2030, with the
median age increasing from 35.3 years to 37.8 years.
Not just the older population, however, is expected
to grow. Th e number of elementary and high school
students is projected to increase by more than 635,000
by April 2030. Th e potential labor force (ages 16-64) is
expected to increase by more than 2.4 million people by
April 2030. Th e population ages 65 and older will more
than double between April 2000 and April 2030, reach-ing
nearly 2.2 million by April 2030.
At the county level, 11 counties–Wake, Mecklenburg,
Union, Guilford, Johnston, Cabarrus, Forsyth, Durham,
Iredell, New Hanover and Brunswick–are expected to
grow by more than 100,000 between April 2000 and
April 2030. Two counties, Wake and Mecklenburg, are
projected to have April 2030 populations greater than
1 million. Wake County is estimated to be the most
populous county in April 2030 at more than 1.56 mil-lion
(growth of more than 900,000 people compared
to April 2000). Mecklenburg is expected to reach 1.46
million, a growth of more than 760,000 people. Al-though
Mecklenburg is currently the most populous
county, Wake County’s population is expected to surpass
Mecklenburg’s by 2013. At that time, Wake County
is expected to have a population of nearly 1.02 mil-lion.
Ten counties–Union, Camden, Wake, Brunswick,
Hoke, Johnston, Currituck, Cabarrus, Mecklenburg and
Iredell–are projected to grow more than 100% between
April 2000 and April 2030. Th e county estimated to
grow the fastest, Union County, is expected to grow by
215%.
By contrast, 19 counties will likely lose population be-tween
April 2000 and April 2030. Edgecombe, Halifax,
Lenoir and Martin Counties are all expected to decline
by more than 6,000 people, with Edgecombe estimated
to decline by approximately 15,000 between April 2000
and April 2030. Nine counties–Edgecombe, Hyde,
Martin, Washington, Halifax, Lenoir, Northampton,
Anson and Bertie–are expected to lose more than 10%
of their populations between April 2000 and April 2030.
Edgecombe, Hyde, and Martin Counties are each pro-jected
to decrease by more than 20%.
Municipal Population Estimates: Th e U.S. Census
released its 2007 municipal population estimates for the
nation in July. Cary (ranked 5th) and Raleigh (ranked
13th) were among the fastest growing cities in the nation
with populations over 100,000 between July 2006 and
July 2007. Charlotte (ranked 9th) and Raleigh (ranked
10th) were among the greatest numerical gainers in
population. Overall, the U.S. Census estimates that
Charlotte was the 19th largest city in the U.S in 2007.
On the Horizon: Look for OSBM to release both its
certifi ed 2007 county estimates and its certifi ed 2007
municipal estimates in September.